"The Capital Times" profit picture

For years, Isthmus has been estimating the profitability of Capital Newspapers by looking at the publicly available dividends to Capital Times Co. stockholders. But now, on the heels of our recent coverage, one stockholder has decided to share the privately held company's annual financial report (PDF).

It shows that in fiscal 2009, which ended Sept. 27, the Capital Times Co. had a net income of $3.3 million, including its share of profits from Capital Newspapers. This is down from nearly $8 million in 2007 and $4.4 million in 2008.

In 2008, the company maintained its usual dividends by tapping into its reserves, not because profits remained high. The Capital Times Co.'s own profitability actually increased in 2009, to more than $1.5 million, mainly due to lower costs. But the amount of revenue it's gotten as half-owner of Capital Newspapers, which owns and publishes the Capital Times, Wisconsin State Journal and other papers, has fallen from $9 million in 2005 to $2.6 million in 2009.

In an accompanying letter, Capital Times Co. board chair Jack Lussier and president Clayton Frink say changes in the newspaper and advertising industries suggest the numbers "will not return to previous levels."